Broker sought $350,000 fee for coal licence

A PUBLICLY-LISTED company was offered assistance to secure one of the coal licences being offered by mining minister Ian Macdonald, if the company paid $350,000 into an offshore bank account, emails obtained by Fairfax Media reveal.

The deal was being touted by the investment banker Gardner Brook who was acting as a front for the family of the controversial Labor powerbroker Eddie Obeid.

In August 2009, Mr Brook, a former Lehman Brothers executive, emailed Coalworks offering to withdraw his consortium's (the Obeids) winning bid if Coalworks paid a $350,000 fee ''to a nominated entity not in Australia''.

Mr Brook offered to ''personally assist with negotiations'' with Mr Macdonald's department. ''We believe … that handled well, they [the department] will play ball,'' he wrote in his email to Coalworks.

Coalworks declined this offer.

The Independent Commission Against Corruption is investigating allegations that the family of Mr Obeid was provided with inside information by Mr Macdonald that stood the Obeids in good stead to make $100 million in profits. The commission has heard Coalworks was never aware of the Obeids' involvement.

Throughout 2009 Mr Brook tried to interest a Sydney businessman, who did not wish to be named, in the opportunity to ''invest'' in a sure-fire coal deal.

Mr Brook told him he was working with Moses Obeid and Richard Poole on the deal. He said Mr Brook said he had ''sourced a couple of licences from the Obeids'' and that he had arranged for Richard Poole, who runs the boutique investment bank Arthur Phillip, to on-sell them.

Mr Poole was one of the major investors in Cascade Coal, which was awarded the licence for Mount Penny, where the Obeids had earlier bought up large tracts of land. ICAC has heard that $7.5 million was transferred to the Obeids from the personal account of Mr Poole's wife, Amanda, in 2011.

Mr Brook's emails also show the machinations that went on over attempts to offload both Mount Penny and Yarrawa (now known as Ferndale) coal licences, which

were controversially awarded to a $1 company, now revealed to be a front for the Obeids.

In late November he advised the businessman: ''The Australian coal deal has been delayed due to the ministerial change, Ian Macdonald was sacked …

''Finalisation of the deal has been delayed because there was a change in Minister for resources and the new bloke, Primrose, is a lefty,'' Mr Brook wrote in the early hours of December 3, 2009.

Later that day Premier Nathan Rees was ousted in a coup led by Mr Obeid in retaliation for Mr Rees having dumped Mr Macdonald and Joe Tripodi from cabinet.

Within days of Mr Macdonald being reinstated to the ministry, the Obeids formally secured the Ferndale licence. Six weeks later they onsold 90 per cent of the project to Coalworks for $2.4 million.

In his opening address, Geoffrey Watson, SC, noted that Mr Macdonald had insisted on granting 11 new areas to junior miners. The junior miners then made enormous profits by immediately selling their licences.

''In these circumstances, the grant of the exploration licence to a junior miner is akin to conferring a gift upon the investors'' in that company, which made ''some extremely rich men even richer,'' Mr Watson said.

Appearing this week will be the mining magnates John Kinghorn, Brian Flannery, Travers Duncan and John Atkinson.